Generally, ________ Motivates Firms to Enter an Industry, While ________

question 118

Multiple Choice

Generally, ________ motivates firms to enter an industry, while ________ motivates firms to exit an industry.

• A)economic profit; economic loss
• B)accounting profit; accounting loss
• C)accounting profit; economic loss
• D)economic profit; accounting loss

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Definitions:

R&D

Stands for Research and Development, the innovative activities undertaken by corporations or governments in developing new services or products, or improving existing ones.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for competition based on product differentiation.

Market Structure

The interconnected characteristics of a market, including the number and relative strength of buyers and sellers and degree of collusion among them, level and forms of competition, extent of product differentiation, and ease of entry into and exit from the market.

Profit Rewards

The financial gains that accrue to entrepreneurs or investors as a result of taking a risk in the marketplace.